WASHINGTON, D.C., Feb. 25, 2025 (UPI) — The Consumer Confidence Index fell by seven points in February to 98.3, the Conference Board reported Tuesday.
The seven-point drop marks the largest decline since August 2021, indicating consumers are concerned about more inflation to come and a cooling economy.
“This is the third consecutive month on month decline, bringing the Index to the bottom of the range that has prevailed since 2022. Of the five components of the Index, only consumers’ assessment of present business conditions improved, albeit slightly,” Stephanie Guichard, a senior economist for global indicators at The Conference Board, said in a statement.
“Views of current labor market conditions weakened. Consumers became pessimistic about future business conditions and less optimistic about future income. Pessimism about future employment prospects worsened and reached a ten-month high,” Guichard said.
The decline in consumer confidence coincides with President Donald Trump‘s return to office, marked with threats of tariffs that include placing some on U.S. allies.
Trump has gone back and forth over instituting 25% tariffs on goods from Canada and Mexico. Most recently he said those tariffs will go into effect in March.
The Expectations Index, which is a measure of how consumers feel about income, business and labor markets in the short term, fell by 9.3 points to 72.9. A measure of 80 points is recognized as a sign of a coming recession. The last time the Expectations Index fell below 80 points was in June.
The fall in consumer confidence was marked across all age groups, but was especially present among consumers between 35 and 55 years old.
Consumers have also become concerned about their family’s’ current and future financial situation, a stark change from responses recorded in January.
“Average 12-month inflation expectations surged from 5.2% to 6% in February. This increase likely reflected a mix of factors, including sticky inflation but also the recent jump in prices of key household staples like eggs and the expected impact of tariffs,” Guichard said.
“There was a sharp increase in the mentions of trade and tariffs, back to a level unseen since 2019. Most notably, comments on the current administration and its policies dominated the responses.”
